Morgan Stanley's report is a mix of highlights and controversy. Cloud is the standout — revenue grew 36% YoY, with external revenue accelerating to 35%, and AI-related revenue delivering triple-digit growth for 10 consecutive quarters, validating Alibaba Cloud's competitiveness in AI infrastructure.
Alibaba & Tencent Miss: Can AI Serve as New Growth Engine?
Alibaba is currently engaged in an unprecedented "cash-for-growth" strategy. Nevertheless, the silver lining remains in the cloud: Alibaba Cloud’s revenue growth surged to 37%.
Goldman Sachs and Macquarie noted that Tencent is shifting into a capital-intensive "catch-up phase," and cut price target to $700 amid margin pressure. This move is expected to dilute short-term profits and potentially scale back the size of share buybacks.
Can Alibaba Cloud’s price increases stem the "bleeding" of profit margins in the next quarter?
Is this a value trap, or simply the darkness before the dawn?
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